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PURA Seeks Further Comment on "Month to Month" Rates, Pricing After Fixed Contracts Expire

November 2, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Connecticut PURA has sought further stakeholder comment on the appropriateness of month-to-month rates and pricing that should be applied at the end of a fixed rate contract

While PURA recently banned new variable contracts and renewals onto variable rate contracts (including at the end of a fixed price term), the legislature also directed PURA to develop recommendations for lawmakers regarding (1) what type of generation services rate structure is best suited for residential customers who allow a fixed contract with an electric supplier to expire and begin paying a month-to-month rate for generation services from such supplier; and (2) what change to the generation services rate and to the terms and conditions of such service that customers may experience after the expiration of a fixed contract when such customers begin paying a month-to-month rate. PURA's latest request for comments are meant to inform such recommendations

Among other things, PURA specifically asked for comment on the following:

• Propose definitions of 'fixed' and 'month-to-month' rates. Separately comment whether additional definitions are necessary to accommodate tiered rate structures (e.g., rate plans of four billing cycles or longer, with rates that change monthly but are memorialized by contract) or other rate plans.

• If the Legislature permits residential month-to-month rates, should such rates be allowed:

     • only at the end of an initial fixed price term (i.e., after four complete billing cycles);

     • as a stand alone product that customers may choose from the outset of their contract period (subject to an initial three bill cycle cap)?

     • or some combination of these options?

• If the Legislature chooses to permit residential month-to-month rates, should such rates be capped? If not, explain why. If so, provide guidelines that would govern the cap. For example, should a cap be:

     • applied as a percentage above the initial rate charged during the initial three bill cycle capped rate;

     • applied as a percentage above the initial rate charged during a fixed term contract;

     • applied as a percentage above the Standard Service rate;

     • applied in some other manner; or

     • limited to one or more billing cycles under each of these scenarios?

• What recommendations and regulatory action(s) should be taken to address two new developments in the residential choice market: enrollment fees and 'tiered' rates (e.g., a residential product set at 8 cents/kWh for four billing cycles then ten cents/kWh for the next four billing cycles, as memorialized in contract terms at enrollment)?

PURA also directed suppliers to provide information about how many customers experience a rate increase when rolling over to a variable rate, versus how many experience a rate decrease. Furthermore, PURA asked suppliers to support claims that variable rates allow suppliers to pass-through wholesale market price decreases, specifically citing historic lows in ISO-NE pricing this summer

Docket 15-06-15

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